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BOLIVIACalm before the next storm?

By Tom Lewis | April 1, 2005 | Page 5

BOLIVIAN PRESIDENT Carlos Mesa offered--and then withdrew--his resignation twice during the month of March under pressure from social forces that he said make his country "ungovernable."

Bolivia's social movements have launched powerful mobilizations, including roadblocks and marches, building on the legacy of the October 2003 "Gas War" that unseated former President Gonzalo Sánchez de Lozada.

The current wave of struggle began in January as residents of El Alto sought to break the city's water contract with privately owned Aguas del Illimani. This second "Water War"--the first took place in April 2000 and reversed water privatization in the city of Cochabamba--overlapped with the debate in Congress over revision of the contracts that had privatized Bolivia's oil and natural gas in the mid-1990s.

The combination proved explosive. For the first time, the social movements and left political parties united in defending the Gas War's demand that transnationals pay 50 percent royalties on natural gas exports. Under existing contracts, foreign companies pay only 18 percent royalties.

Moreover, protesters have called for the nationalization of Bolivian gas. Not only should transnational companies to pay more for profiting from Bolivian resources, they argue, but also the guardianship of those resources should be placed in the hands of workers and citizens.

A key issue is whether Bolivians and the Bolivian government will be able to establish the price of exported gas, or whether the transnationals will have the power to do so. If the transnationals fix gas prices at a lower rate, they can sell cheap to their own intermediary companies and then raise prices as the gas arrives at its destination. This would mean fantastic profits for the oil companies and reduced revenue for improving the lives of ordinary Bolivians.

Meanwhile, local oil interests in the state of Santa Cruz are demanding autonomy and even secession if Mesa cannot defend the concessions to the transnationals awarded in the original oil contracts. The U.S. embassy and the International Monetary Fund have also issued stern statements about the consequences of changing the contracts.

In both of his resignation speeches, Mesa claimed that it would be financial suicide for Bolivia to threaten the profits of the gas corporations. Presidents Lula of Brazil, Néstor Kirchner of Argentina, and George Bush of the U.S. declared strong support for Mesa's effort to preserve oil company profits.

In announcing his resignation the first time, Mesa asked Bolivians to show their support for his neoliberal policies. More than 100,000 middle-class Bolivians responded the next day by filling the plaza across from the presidential palace with pro-Mesa cheers.

But one Mesa ally--Evo Morales's Movement Toward Socialism party (MAS)--didn't join the protest. Morales's party earlier broke with the rest of the Bolivian left during the Gas War of October 2003 and the fraudulent Gas Referendum of July 2004. Morales and the MAS supported Mesa's succession to power, knowing full well that Mesa would continue Sánchez de Lozada's neoliberal policies. The MAS also supported Mesa's referendum on the marketing and export of natural gas, even though "nationalization" was not mentioned as an option.

Throughout 2004, the MAS made a priority of its electoral ambitions and discouraged popular action. This effective support for Mesa's government cost Morales' party in the fall municipal elections. Although the MAS advanced in some regions, its nationwide progress came nowhere near to fulfilling expectations.

At least for the time being, the MAS has now rejoined the majority of the left, helping both to build and lead the recent mobilizations. Pressure from the social movements appears to have affected not only Mesa, but also Morales.

An uneasy quiet reigns in Bolivia at the moment, but further upheavals lie just around the corner.